Morgan Stanley's Gorman Stepping Down as Chairman

Let's get back to the breaking news out of Morgan Stanley. James Gorman will step down as the bank's chairman at the end of the year. Remember, he already passed on the CEO title to Ted Pick. And it's been thought for a while that Ted Pick will eventually take over as chairman as well. But we don't know who the exact replacement will be for now. Joining us with more is Bloomberg News finance reporter Sridhar Natarajan. So, Sri, what do we know about Gorman's plan? He's already kind of laid out a great succession path after turning the bank around, right? He's been very methodical about how he will be giving up his duty starting May 2023. When he did talk about the idea that he will be eventually giving his title, giving up his title as the CEO of the firm. He then said that he will stay on for a little while to help with the succession, to help with the transition and then give up his chairman title as well. While today he formally announced that he will be stepping down as chair of Morgan Stanley at the end of this year. This is a significant moment in time. This is a man who jumped to Morgan Stanley fairly in his career. He only joined Morgan Stanley in 2006 to help rejuvenate their wealth management business. But soon after, the financial crisis hit and Morgan Stanley was in a world of trouble. So when James Gorman rose to the title of CEO back in 2010, Morgan Stanley was spending up fending off serious questions about his ability to survive. Not only did he bring back the firm from the brink of failure, he helped transform it into a wealth management powerhouse. You could argue that James Gorman effectively bought low, sold high, and now the challenge for Ted Pick, his successor in the CEO role and most likely as chairman down the road, will be to prove that he can still drive this growth story forward. That there is more gains out there for Morgan Stanley, for investors to embrace. Is it, is it likely that we get a different successor as chairman for now three, since obviously Ted has to be focusing on his new job. Is it likely that we get say A1 year interim or two year interim chairman before Ted can take over both titles as successful? The most successful Wall Street CEOs or want to do that will be a big story if that were to happen. We do not expect that to happen at JP Morgan. Jamie Dimon is CEO and chair. At Goldman Sachs, David Solomon is CEO and chair and Morgan Stanley, which would consider itself as a part of that trio among the elite of U.S. banking. You don't expect that CEO and chair role to be split. So if Tedpick were not to rise into that seat, were not to step into that seat, it would indicate not everything's hunky Dory at Morgan Stanley and we're not expecting that. Although I have to say, Sri, when I was a kid, it was widely considered bad corporate governance to have the CEO also be the chairman of the board. Is that no longer the case or is Wall Street just an outlier? And look, you're not alone. There are a lot of shareholders who still make that push. They want the CEO and chair role to be separated. In fact, JP Morgans shareholder meeting, there were 42% of people who said more than 42% who said that the CEO and chair role should be separated. That is for Jamie Dimon, one of the longest serving U.S. banking leaders. Despite that, the convention, at least in U.S. banking, has been if the bank is doing well and the bank is in good shape, you normally expect the CEO and chair role to be held by the same person. Corporate governance push a revival on that front might change that down the road, but the convention right now is for the same individual in both seats.